Tuesday, September 22, 2009

US Mint Gold Numismatic Product Price Increase

The price of gold has spent much of the prior week above the $1,000 level. This makes a price increase for the US Mint's current gold numismatic products almost certain to take place.

Under the US Mint's pricing policy for gold and platinum numismatic products, prices can be adjusted as often as weekly in response to changes in the average price of gold. Every time the average price of gold moves across $50 increments, prices are raised proportionally. The last price increase occurred two weeks ago when the average price of gold moved into the $950 to $999.99 range. This week prices would be adjusted to the $1,000 to $1,049.99 range.

The London AM and PM Fix Gold prices for the weekly period considered by the US Mint are included below. Based on witnessing when price changes occurred in the past, it seems that the US Mint uses the average of the AM Fix prices from the prior Thursday to the current Wednesday. PM Fix prices are included, but only from Thursday to Tuesday.

London AM and PM Fix Gold Prices

AM Fix

PM Fix

Thurs Sept 17

1020.50

1018.50

Fri Sept 18

1014.00

1012.00

Mon Sept 21

999.25

997.00

Tues Sept 22

1015.75

1014.00

Wed Sept 23

TBD

N/A

The only gold numismatic products current offered by the US Mint are the First Spouse Gold Coins and the 2009 Ultra High Relief Double Eagle. The First Spouse Coins will see their prices raised from $654 and $641 for proof and uncirculated coins to $679 and $666 $665.75 for proof and uncirculated coins, respectively. The UHR will see its price raised from $1,339 to $1,389. These will represent the highest price levels since the US Mint first adopted their new pricing policy.

The impending price change creates an interesting confluence of events for the 2009 Ultra High Relief Double Eagle Gold Coin. This Monday, the US Mint completely removed ordering limits from the coin and this Wednesday, it is almost certain that the price of the coin will be raised by $50. Bulk buyers who believe that the price of gold won't be falling back below the $1,000 level will have a small remaining window of time before prices are raised.

If you are considering buying any of the US Mint's gold products, try to place your orders today or early tomorrow morning before the price change take effect.

37 Comments:

In addition to getting in on the gold before it goes up I think we are on the verge of selling out of some of the other US Mint coin options. The Native American Philadelphia roll has been on backorder for about a month now and that is usually a precursor to selling out when the option was previously available in stock for some time. With the latest Mint Stats, numbers would tell us that we are pretty close to selling out of both Kennedy options (rolls and bags). The mint has already sold close to 3 million of the 3.4 million Kennedey's produced. And last, as with the previous quarter offerings all 4 remaining American Samoa offerings will reach sell out status by noon on Monday with the release of the Virgin Islands options that same day. So, you might want to consider picking up some of these products as well.

Good points. I've been watching the Kennedy Halves myself these past few weeks, trying to decide if I want to buy any of them or not.

The American Samoa Quarter products are questionable. The bad secondary market performance by the Puerto Rico and Guam products make these more of a risk, when all you want is the quick, profitable turn-around. For those who want to hold them long-term, they might be good. But, past experience has shown me time and time again that the SHORT-term is the best time to unload 99% of this stuff. It nearly ALWAYS goes down later.

A product that might be a surprise sell-out shortly is the John & Julia Tyler Coin and Spouse Medal Set. It isn't even backordered, I know. But, the John & Letitia set sold out at around 10,000 units. The Mint might not want to use many more of the "Satin Finish" John Tyler dollars for the sets with spouse medals, so in order not to exceed the levels used for past presidents, the Mint can only sell around 6,000 or so sets with Julia. They might just cease selling those at that level, backordered or not. It's definitely something to think about. If you want any, don't wait too long!

By the way, does anyone know how to truly calculate the total number of Kennedy halves made this year? If 3 million have been sold through bags and rolls sales, another million in clad proof sets and yet more to come in uncirculated sets, it's really hard to know. Are they made from different materials for the clad and uncirculated sets? A little help would be appreciated.

There have been 3.4 million total Kennedy Halves minted this year at Philadelphia and Denver, evenly split between them. These coins (that are being sold entirely through the bags and rolls program) are business/circulation strikes, the exact same material and appearance of any coins you would obtain from any bank. These could be considered your traditional Kennedy Halves.

The coins included in the U.S. Mint Uncirculated Coin Set have a "Satin Finish" on them, making them different from the circulation strikes. The coins included in the U.S. Mint Proof Set have the "S" Mint Mark from San Francisco, plus they have the frosted appearance. There are also 90% silver Kennedy Halves included in the U.S. Mint Silver Proof Sets, also with the "S" Mint Mark.

To get the total number of 2009 Kennedy Halves struck of all types from all Mints, you will need to wait until sales for all of the 2009 numismatic sets (uncirculated, proof and silver proof) have ended, then just add them up based on the final sales statistics for each provided by Numismaster.

I'm confident that when the 3.4 million circulation strikes are gone, the Mint will not be making any more of those. If you want any, you had best buy them SOON. They will not be hanging around for much longer.

As for the UHR, most likely the backorder push is due to increased orders following the lifting of the order limit. Just a guess. Also, if they were stopping at 100,000 my guess is that that number has been exceeded aswell following the limit lift.

I wouldn't be surprised at all if the mint sells out of the UHR'S in the next two or three weeks. Here is my reasoning.

1. They have increased there limits from 1 to 10 to 25 and now unlimited. They gave more than enough time for collectors to purchase them.

2. The mint seems to like round numbers lately, maybe it's a Moy thing, but 100k sounds like a really nice round number.

3. Gold is at a high and the mint would like to sell the last 8000 or so at this huge markup so hence getting rid of the cap.

4. The mint is currently doing an inventory check and I'm sure they would like to get these off there books.

5. The back order dates have increased this week. Granted originally they were back ordered when they first came on sale, but that was many months ago when they were still relocating and were all messed up. So I think the current increasing back ordering makes perfect sense. The back order dates increased from 10/1 to 10/10

6. And lastly I believe that this will be a large sales this week due to the price of gold and dealers trying to stock up before the 50 dollar price increase.

I would like to add another thought to John's list of reasons above: The UHR is an expensive and complex coin to produce and it has expensive accessories that come with it. As gold goes up, the UHR increases at the same rate (per the mint pricing policy on precious metals, all gold one ouncers increment at $50 per step) as a potentially less expensive coin to sell with less accessories such as the gold eagle or gold buffalo. In short, the Mint's contribution margin for the less complex and less expensive non-UHRs gold coins of comparable weight increases faster relative to the UHR (at least based on the current Mint pricing policy). Profit is a strong motivator...even for a government entity like the Mint.

My previous post also implies that the Mint will be selling other gold products in place of the UHR. I am hoping that by late October, either the GAE or Buffalo will be taking the UHR's place...just in time for Christmas shopping. :-)

I have to believe that the Mint has seen firsthand the economics of, let's say, the LP1 set that was only on sale for 10+ days. The prices on eBay went over $100/set. They then came out with the LP2 sets and probably made a killing by, dare I say, overproducing. Looking at the demand for bullion and also what the 2008 West Point Gold Buffaloes are doing on eBay, they would be crazy not to get in on the profits by offering a 2009 W Gold Buffalo. I would certainly buy one or two... JMHO.

That's hilarious! The Mint did not reprice the First Spouse Gold Coins to $666, but rather to $665.75! This is the first time the prices ever got this high for us to find out just how they would handle the negative connotations of that number!

WOW ! You get a rate decrease on the price increase When you buy the first spouse uncirculated gold coins now. Heaven forbids they try and sell them at the increase to 666 which the price would be if they stuck to their rates. Remember In God We Trust all others pay cash.

Feels abit like riding an elevator. I am happy that I purchased another six gold coins before the jump in prices. Now I will wait until somebody presses the down button before I come back into this market. And if gold keeps rising, maybe the total mintage numbers of my coins will fall making them a better long term investment.

And the Mint will probably keep churning out these "bullion" UHR that they can sell to the unsuspecting public at such huge premiums that anyone who buy these is unlikely to see significant investment potential ;especially so with the dealers hoarding these in large numbers for the secondary market.

Yes, the price of gold does rise and fall with demand; but if you sell your gold coins you are likely to get "Yankee Dollars" in exchange and right now the government has the printing press running at "full speed ahead".

One can only wonder what all those trillions of newly printed dollars will be worth in the future...

Clearly those who buy and sell are thinking short term and not long term. I have found that the coin market and coin values are generally speaking, hit or miss. Right now, gold is hot, so any coins made of the precious metal are hot. Will it be that way in five years? Who knows. It's great to speculate, but I feel much more secure with the stock market, which have risen 60% this year. Considering the last two years, I'm about even, but do expect to see a net gain by next year.....